Obligations to provide evidence in the employment relationship – a fine is imminent!
On June 23, 2022, the law transposing an EU Directive on transparent and predictable working conditions in the European Union was passed by the Bundestag. This law pri-marily affects the Evidence Act (Na-chweisgesetz NachwG), which requires employers to record the essential terms of an employment contract. Until now, the Evi-dence Act was considered to be of lesser importance. However, this changes primarily because breaches of the Evidence Act will now be subject to fines. It is therefore urgent-ly recommended to implement the new (and old) requirements of the Evidence Act. If the Federal Council grants its approval, the law will enter into force as early as August 1, 2022. This means that employers do not have too much time left to make the neces-sary changes to the model contracts.
The amendment of the law results in innovations, in particular with regard to:
1. Extensions of the obligations to provide evidence and information
2. Shortening of existing deadlines
3. Evidence in the case of existing contracts
5. Amendments to the Act on Part-Time Employment and Fixed-Term Employment (TzBfG), the Temporary Employment Act (AÜG) and the Trade Code (GewO)
B. The adjustments in more detail
1. Mandatory content of employment contracts ("Obligations to provide evidence")
The existing provisions of the Evidence Act are merely supplemented and adapted by the amending law. In particular, the provision stipulating that the essential terms of the contract are to be set down in writing, the written records are to be signed and handed over to the employee remains in force. Fulfilment of the obligations by means of a digital document with an electronic signature or the scan of a signed document thus remains excluded.
In the interest of clarity, we present here only the essential obligations that have been added as a result of the reform. A large part of the new obligations to provide evidence is already covered by the model contracts prepared by SZA in the past. It is also a relief that it remains permissible to refer to applicable collective agreements, works agreements or service agreements without having to summarize their content.
However, under certain aspects, adaptations of the model contracts previously used will become necessary:
- In addition to the agreed working hours, the agreed rest breaks and rest periods and, in the case of shift work, the shift system, the shift rhythm and the preconditions for shift changes must now also be documented. To the extent there are no collective regulations, additional work is to be expected regarding the issue of working time.
- If work on call is agreed, evidence of the modalities must be provided in the future. With regard to conditions for termination, new obligations to provide information are added: The procedure to be followed in the event of a termination of the employment relationship must be presented. This includes at least: the requirement of written form, the notice periods and the period for bringing an action for unfair dismissal; as a precaution, we also recommend a reference to the legal consequences of missing the last-mentioned deadline. In this context, however, it is sufficient to refer to the statutory regulations and the relevant collective agreements.
- In the event that the employee works abroad for at least 4 weeks and in the event of an assignment of employees, the employer must fulfil further obligations to provide evidence and information.
- Furthermore, a reference is no longer only necessary to the applicable collective agreements, works or service agreements, but also, if applicable, to General Contractual Regulations in the area of church employers (AVR) – although in this context the contractual reference is standard anyway.
- Finally, if there is an entitlement under an occupational pension scheme, the name and address of the pension provider must be listed as a general rule. In the event that the employee is granted an entitlement to further training, this must also be included in the evidence.
2. Time limits
The employer no longer has one month from the beginning of the employment relationship – as was previously the case – to set down the terms of the contract in writing. In future, a staggered regulation will apply:
- At the latest on the first day of performance of the work, evidence of the information on the name and address of the contracting parties, the composition and amount of the remuneration and the agreed working time must be provided;
- At the latest on the seventh calendar day after the agreed start of the employment relationship, evidence must be provided of, among other things, the start of the employment relationship, the duration of the employment relationship and the probationary period, the place of work, a performance description, and the possibility of ordering overtime;
- The remaining information must be handed over within one month at the latest.
In practice, this is likely to result in full evidence being brought forward and inclusion in the employment contract is strongly advised for simplification – even if this means that the employment contract must be in writing.
Employees must no longer be notified of a change in the essential terms of the contract within one month at the latest, but on the day on which such change takes effect.
3. Existing contracts
Employees with contracts concluded before August 1, 2022, are also entitled to the employer complying with the extended evidence requirements. In these cases, however, the employer only has to take action at the request of the employee.
A breach of the obligations to provide evidence will most likely continue to have no direct impact on the substantive validity of the terms and conditions of employment and the employment relationship. However, compliance with the regulations is already important in view of the newly added regulations on fines: Violations of the Evidence Act can be punished with a fine of up to EUR 2,000.
5. Other changes
The Part-Time and Work Contract Limitation Act is amended, among other things, to the effect that a probationary period must be in reasonable proportion to the duration of the limited-term employment relationship and the nature of the work. An agreement for a probationary period of 6 months will therefore no longer be permissible for short limited-term contracts. However, the new regulation does not change the six-months waiting period for the application of protection against dismissal; effects therefore only arise with regard to the notice period to be observed.
In addition, an employee whose limited-term employment relationship has already lasted longer than 6 months may notify the employer of his or her wish for an indefinite employment relationship. The employer must respond to such a request within one month and give reasons for the response. Both notifications are subject to text form.
The Temporary Employment Act now stipulates that the temporary employee must be informed in text form of the company name and address of the temporary employer to whom he or she will be assigned before each assignment. Furthermore, temporary employees have a right vis-à-vis the temporary employers to whom they have been assigned for 6 months or longer to receive a response in text form upon a written request to conclude an employment contract with the temporary employer, with such response stating the reasons.
It is still unclear which civil law sanction will result from a failure to observe the above-mentioned "duty to respond".
Model employment contracts commonly used so far already take into account the majority of the new requirements, but not all of them, and should therefore be updated for new contracts.
Due to parallel amendments to the Vocational Training Act (Berufsbildungsgesetz – BBiG), similar obligations, which are also subject to fines, must be observed for trainee contracts.